ECONOMIC GROWTH IS SO LAST CENTURY

Economist John Cochrane’s piece in the Wall Street Journal (5/4/16) was terrific, an admirable presentation of the reasons why economic growth is nearly extinct in America, as it now is in most of the rest of the world.  (Not counting China, which first needs to pick off the rest of the low-hanging fruit before achieving the capitalistic dead zone.)  But Cochrane’s prescription for growth is becoming the dodo bird of economic thought.  Even if we elect the Republicans’ presumptive nominee, even if the Republicans somehow maintain control of Congress, there will be few remaining politicians or academics  who could put together a cogent and coherent argument in support of the conservative (i.e., what used to be called libertarian or Hayekian) principles of economic growth.  As a practical matter, the term “economic growth” may already be obsolete.

Trying to analyze the Trumpian victory, aka the Rubio/Kasich/Cruz self-immolation, one is struck by the thought that the Republicans had no candidate who was capable of explaining free-market economics to the general public.  One would like to think that Rubio gets it, and Cruz seems to arrive at it backwards (via his trademark “minimalist government” approach), but it is plain that Kasich thinks of growth only as the reward for good central-planning. Trump, alas, seems ignorant on the topic; his only useful contribution is his advocacy of tax cuts.  But even Cruz and Rubio at their best were never able to show anything remotely comparable to Reagan’s crude-but-sophisticated mastery of the Hayek /Friedman principles.  If our best politicians are all either in permanent denial (both the Democrats) or blissful ignorance (Trump and the other Republicans) of those principles, what chance does free-market capitalism have?

The Cochrane essay is an unexceptionable, good-faith effort to set forth free-market economics for the masses, but does the country really get it?  We didn’t get it when we had it (JFK, Reagan, even Bill Clinton on a good day), and we certainly don’t get it after Obama’s 7-year tutorial in how leftism can wreck a major economy.

One hears that the Republican Party is going to be shaken up, even dismantled, but the more likely outcome is that both our major parties will survive, that the surviving versions of the parties will have re-defined the “center” on matters of economics, and that the new center will be so far to the left of Hayek and Friedman that we will have little left to quibble about other than the optimal deployment of the government’s unlimited powers of taxation and regulation.  The Reagan movement has died, R.I.P.  We have entered the Populist era.  Probably to be followed by the authoritarian era, something like an Iron Age with smartphones.

 

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